Abandoned Mine Land (AML) Reclamation Program; Enhancing AML Reclamation

SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM)

is amending its rules concerning the financing of Abandoned Mine Land

reclamation (AML) projects that involve the incidental extraction of

coal. Projections of receipts to the AML fund through the year 2004,

when the authority to collect fees will expire, strongly indicate that

there will be insufficient money to address all problems currently

listed in the Abandoned Mine Land Inventory System. Given these limited

AML reclamation resources, OSM is establishing an innovative way for

AML agencies, working with contractors, to maximize available funds to

increase AML reclamation.

The first revision amends the definition of ``government-financed

construction'' to allow less than 50 percent government funding when

the construction is an approved AML project under the Surface Mining

Control and Reclamation Act of 1977 (SMCRA or ``the Act''). The second

revision adds a new section which requires specific consultations and

concurrences with the Title V regulatory authority for AML construction

projects receiving less than 50 percent government financing. These

consultations and concurrences are intended to ensure the

appropriateness of the project being undertaken as a Title IV AML

project and not under the Title V regulatory program.

DATES: Effective March 15, 1999.

FOR FURTHER INFORMATION CONTACT: D. J. Growitz, Office of Surface

Mining Reclamation and Enforcement, U.S. Department of the Interior,

1951 Constitution Avenue, NW, Washington, D.C. 20240; Telephone: 202-

208-2634. E-Mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

A. What is the Abandoned Mine Land (AML) reclamation program?

B. How is AML reclamation funded and how do States and Indian

Tribes implement their programs?

C. What types of abandoned sites does this rule target?

D. How will the final rule work?

E. What is the relationship between the AML agency and the AML

contractor?

F. What is an example of how the final rule will reduce the

government's share of reclamation costs under Title IV?

G. Can private organizations (e.g., watershed groups) assist in

AML reclamation efforts?

H. Will the final rule adversely affect AML reclamation at some

sites?

I. How will an AML agency approve reclamation projects under the

final rule?

J. What will be the consequence of AML contractors removing coal

outside the limits authorized by the AML project?

K. The proposed rulemaking.

II. Response to Comments and Final Rule

A. What is the statutory authority for the final rule?

B. What is the amended definition of ``government-financed

construction'' at section 707.5?

C. What is the change in information collection for section

707.10?

D. What are the information collection requirements for section

874.10?

E. What is the purpose behind new section 874.17: ``AML agency

procedures for reclamation projects receiving less than 50 percent

government funding?'

F. How will the consultation in section 874.17(a) work?

G. What types of concurrences between the AML agency and the

regulatory authority will be required in section 874.17(b)?

H. Under section 874.17(c), how will the AML agency document the

results of the consultation and the concurrences with the Title V

regulatory authority?

I. What special requirements will apply for qualifying section

874.17(d) reclamation projects?

J. What must the contractor do under final section 874.17(e) if

extracting coal beyond the limits of the incidental coal specified

in section 874.17(b)?

K. How does this rulemaking relate to the established AML

priority system for selecting projects?

L. Is this rulemaking really more about remining than AML

reclamation?

M. Other comments.

III. Procedural Determinations

I. Background

A. What is the Abandoned Mine Land (AML) Reclamation Program?

Title IV of SMCRA established the AML Reclamation Program in

response to concern about extensive environmental damage caused by past

coal mining activities. The program is funded primarily from a fee

collected on each ton of coal mined in the country. This fee is

deposited into a special fund, the Abandoned Mine Land Fund (Fund), and

is appropriated annually to address abandoned and inadequately

reclaimed mining areas where there is no continuing reclamation

responsibility by any person under State or Federal law. Under Title

IV, the funding of reclamation projects is subject to a priority

schedule with emphasis on sites affecting public health, safety,

general welfare and property. In contrast, Title V establishes a

program for regulating active mining and reclamation.

In most cases, the implementation of both Title IV and Title V

authority has been delegated to States. Depending upon each State's

internal organizational structure, the Title IV and Title V programs

are, in many cases, carried out by separate State authorities.

Currently, 23 States and 3 Indian Tribes (the Hopi, the Navajo and the

Crow) have authority to receive grants from the Fund and are

implementing Title IV reclamation programs in accordance with 30 CFR

Subchapter R, and through implementing guidelines published in the

Federal Register on March 6, 1980 (45 FR 27123), and revised on

December 30, 1996 (45 FR 68777). In States and on Indian lands that do

not have a Title IV program, reclamation is carried out by OSM.

B. How is AML Reclamation Funded and How Do States and Indian Tribes

Implement Their Programs?

State and Indian Tribal AML programs are funded at 100 percent by

OSM from money appropriated annually from the AML Fund. The States and

Indian Tribes must submit grant applications in accordance with

procedures established by OSM and existing grant regulations found at

30 CFR 886. They must certify with each grant that the requirements of

all applicable laws and regulations are met, including the Clean Water

Act, the Clean Air Act, the National Historic Preservation Act, and the

Endangered Species Act. They may undertake only projects that are

eligible for funding as described in either Section 404 or Section 411

of SMCRA and which meet the priorities established in Section 403 of

SMCRA. OSM requires that the State Attorney General or other chief

legal officer certify that each reclamation project to be undertaken is

an eligible site.

Certain environmental, fiscal, administrative and legal

requirements must be in place in order for a program to receive grants

for reclamation. An extensive description of these requirements can be

found at 30 CFR 884, but certain of those are mentioned here to

highlight safeguards the AML program has in place. For example, the

agency must have written policies and procedures which outline how it

will comply with the requirements of

[[Page 7471]]

SMCRA and implementing regulations in conducting a reclamation program,

how it will comply with all applicable Federal and State laws and

regulations, how projects will be ranked for reclamation priority and

how the public will be given an opportunity to comment on proposed

reclamation projects. The State or Indian Tribe chooses individual

projects based upon the selection criteria in its reclamation program.

While these criteria differ among AML programs, all consider the

priority of the problem, public opinion regarding the project, cost

effectiveness, technical feasibility and how the area will be used once

reclaimed.

State and Tribal programs seek public input in several ways. For

example, some AML programs require that a notice requesting comments on

proposed reclamation be published in newspapers of general circulation

in the area to be reclaimed. Some publish newspaper notices asking the

public to identify potential reclamation sites. Others have public

meetings to discuss upcoming reclamation or to identify potential

sites. Still other programs seek public input about reclamation

activities or potential sites through Federal Register notices.

OSM does not approve individual projects. However, before

construction begins on any project, OSM must ensure that all

requirements of the National Environmental Policy Act of 1969 are met

before providing authorization to proceed on the project.

OSM annually reviews the State and Tribal AML programs to ensure

that all program requirements are properly met, including site

eligibility, proper financial policies and procedures, and reclamation

accomplishments. State and Tribal agencies and OSM also review

completed projects to determine the success of AML reclamation.

Completed projects may be revisited as part of a site-specific

contract, as part of an annual post-construction evaluation, or as

otherwise specified under the State or Tribal AML reclamation program's

maintenance plan. Further, AML reclamation programs evaluate selected,

completed AML reclamation projects to determine how effective the

overall reclamation program has been. Normally, these evaluations are

annual, random samples of many types of reclamation, such as reclaimed

subsidence areas, eliminated landslides, sealed openings and removed

refuse piles.

C. What Types of Abandoned Sites Does This Rule Target?

The rule is intended to facilitate the reclamation of certain

abandoned mine lands that have little likelihood of otherwise being

reclaimed under either the current Title IV or Title V programs. These

sites would not likely be reclaimed under the Title IV program because

of severely limited funds; nor would they likely be mined under the

Title V regulatory program due to the marginal coal reserves they

contain and/or the potential risk for long-term liability associated

with existing acid mine drainage (AMD) or other environmental problems.

According to estimates in the Abandoned Mine Land Inventory System,

the most serious AML problems--those identified as Priority 1 or

Priority 2 sites in the System--would cost more than 2.6 billion

dollars to reclaim. These include highwalls, open shafts and accessible

underground mines presenting a danger to human health, safety and

welfare.

Thousands of other AML-eligible sites--Priority 3 sites that do not

pose the same degree of danger to the public but that do adversely

affect the environment--would cost tens of billions more dollars to

correct. Without an innovative way to finance more reclamation, there

is very little likelihood that enough AML money would ever be available

to fund the reclamation of even the most serious of these eligible

sites, let alone the eligible sites with primarily environmental

impacts. Without adequate funding, exposed coal seams and subsided

underground workings would continue to contribute acid mine drainage

(AMD) and other environmental problems, often far beyond their realty

boundaries. Interconnected abandoned mine passageways flooded with poor

quality water would continue to discharge the characteristic ``yellow-

boy'' iron precipitates and low pH waters into streams. Coal refuse

piles would continue to yield excessive sediment and acid discharges

into local water supplies killing fish, endangering wildlife and

rendering streams useless for recreation.

The challenge which OSM attempts to address with this rule is how

to accomplish reclamation at mines that the AML fund cannot afford to

reclaim and that the private sector is not interested in remining. The

answer for these sites lies in increasing the amount of reclamation

without increasing the cost to the AML Fund.

D. How Will the Final Rule Work?

The current rules at 30 CFR 707.1 and 707.5 provide for a Title V

exemption for the extraction of coal which is an incidental part of a

government-financed construction. ``Government-financed construction''

requires that the project be funded 50 percent or more by funds

appropriated from the government financing agency's budget or obtained

from general revenue bonds. AML guidelines first published in the

Federal Register on March 6, 1980 (45 FR 14810) and later amended on

December 30, 1996 (61 FR 68777) provide for the sale of coal recovered

incidental to an approved AML reclamation project. The 50 percent

government-financing requirement of section 707.5 has not affected

agency selection of AML construction projects where the anticipated

proceeds from the sale of incidental coal were expected to be a small

percentage of the total project cost. However, in cases where the

anticipated proceeds from the sale of incidental coal were expected to

be 50 percent or greater of the total project cost--a level that would

have reduced the government contribution below the required 50 percent

floor--this funding requirement discouraged AML reclamation.

For sites with substantial deposits of incidental coal, we expect

that AML contractors will reflect the anticipated sale of such coal

through a lowered project bid price. The lowered project bid price

would, in turn, reduce the government's share of the total cost of the

project. As a result, less public funding will be required for these

sites to accomplish the same level of AML reclamation. By reducing the

government's share of the cost of reclamation, AML money becomes

available for other AML reclamation projects that would otherwise not

be funded. Under this new rule, the contractor makes a profit, the

government saves money and--most important of all--additional abandoned

sites that we could not afford to reclaim in the past are reclaimed.

The key limitation in the application of this rule is that the coal

removed and sold must be ``incidental'' to the reclamation project--

physically necessary to remove in order to address the identified

health, safety or environmental problem of the approved AML

construction project. This concept conforms to existing regulations at

30 CFR 707.5. Coal extracted beyond that which is determined to be

incidental will be subject to Title V permitting provisions.

This rule is not designed to address sites involving redisturbance

and subsequent reclamation of abandoned mine lands, such as highwalls

and outslopes that have become environmentally stable over the years

and no longer pose problems. Rather, we hope to target long-standing

AML

[[Page 7472]]

health, safety and environmental problems by the partial or complete

removal of coal during AML reclamation projects. Such projects have the

potential to remediate subsidence, to reduce the likelihood of

perpetual acid discharge problems that are costly to treat through

conventional chemical means, and, in some cases, to permanently

eliminate AMD by removing the source of the problem.

This final rule will not alter existing AML program requirements.

The eligibility for AML projects, the procurement systems which States

and Indian Tribes use to contract for AML reclamation, and all Federal

and State requirements that pertain to AML projects will remain the

same. Undertaking AML projects that use less than 50 percent

government-financing will not be mandatory for States or Indian Tribes;

they may choose not to participate in this aspect of AML reclamation.

However, State and tribal programs that do participate will be

responsible to ensure that the provisions of this rule are applied

appropriately and not abused.

E. What is the Relationship Between the AML Agency and the AML

Contractor?

The relationship between the AML agency and the AML contractor

under the final rule will be the same as for any approved reclamation

project. Actual reclamation is usually done under a site-specific

contract between the reclamation agency and third-party contractors.

These contracts clearly outline the scope of work for each project, the

cost, the time frames involved, how the contractor will be paid and

penalties for failure to meet the contractual obligations by either

party. The content of the contracts, along with bidding and selection

procedures, performance bonding requirements and other contractual

matters are established within each program in accordance with State or

Tribal laws. The AML agency ensures that the contractor complies with

applicable procedures through site visits and other monitoring

techniques. If the contractor does not meet the terms of the contract,

the AML agency invokes the penalties contained in the contract and

allowed by law.

Each contract sets forth any unique features for the project to be

reclaimed and any site-specific criteria for that project. For example,

a project to address water quality problems will outline the acceptable

pH or sediment levels for the water or sediment, the monitoring period

associated with the treatment, whether wetlands will be created, any

projected effects on wildlife and any particular environmental impacts

at the site or on adjacent properties. Sediment and water quality

control plans must provide for adequate environmental protection during

the construction phase of the reclamation project as well as after its

completion.

When contracts are written, the AML reclamation agency can require

that a project pass specific requirements after reclamation. For

example, a contract could specify that a retaining wall provide

protection for a highway for a three-year period. The contract could

also specify that, should the retaining wall fail, the contractor must

return to repair the damage. The frequency and extent of follow-up by

the AML reclamation agency is written into the contract. AML contracts

also identify the incidental coal that can be extracted under the

project.

F. What Is an Example of How the Final Rule Will Reduce the

Government's Share of Reclamation Costs Under Title IV?

The following example illustrates the process by which extraction

of incidental coal under this rule can reduce the cost to the

government for Title IV reclamation at an AML eligible site.

Example: After the requisite consultation and concurrences with

the Title V regulatory authority (see response to question E. in

Section I of this preamble: ``What is the relationship between the

AML agency and the AML contractor?''), the AML agency announces a

contract solicitation to receive bids for the reclamation of a

refuse pile contributing sediment and acid mine drainage to local

streams. Prior to the solicitation, the AML agency estimates the

total cost of reclaiming the refuse pile (removing it to another

site, burying it, and revegetating both sites) at $500,000. This

figure includes a $50,000 allowance for administrative expenses such

as project design and project monitoring.

Based on existing chemical analysis of the refuse pile,

including BTU information, AML estimates place the net proceeds of

the incidental coal in the refuse pile (after transportation,

cleaning, royalty costs, etc.) at roughly $400,000. The estimated

net cost for completing the project would then be $100,000

($500,000--$400,000). Based on these estimates, project bids from

contractors would be expected to come in around the $100,000 range.

Therefore, reclamation of a project that would ordinarily cost

the AML agency $500,000 without contractor sale of incidental coal,

or that would cost the agency at least $250,000 under the existing

rule requiring at least 50 percent government financing, will now

cost only about $100,000 under this new rule. If the contract is

awarded, the contractor becomes fully responsible for the completion

of the work regardless of the contractor's actual proceeds on the

sale of incidental coal.

G. Can Private Organizations (e.g., Watershed Groups) Assist in AML

Reclamation Efforts?

Yes. AML agencies can form partnerships with industry, private

citizens and other government agencies to help address AML problems.

Partnerships, such as those developed under the Clean Streams

Initiative--a partnership of Federal, State and local government as

well as other public and private interests--can assist in reclaiming

lands. Outside funds can also be contributed for specific AML projects

as allowed by law.

H. Will the Final Rule Adversely Affect AML Reclamation at Some Sites?

No. Under the AML program, the percentage of government funding for

reclamation of an eligible site does not adversely impact the quality

of the reclamation of that site. As with any other AML reclamation

project, under this final rule the AML agency selects individual sites

from the Abandoned Mine Land Inventory using its priority system. The

AML agency then develops the reclamation parameters for that site and

includes them in its reclamation contract. We emphasize that the AML

agency, not the AML contractor or the owner of the coal, establishes

these parameters. The AML agency oversees the reclamation and ensures

that the contractor adheres to the contract requirements, including

removing and selling only that coal which has been identified as

incidental.

I. How Will an AML Agency Approve Reclamation Projects Under the Final

Rule?

As with any other AML project, reclamation projects involving the

incidental extraction of coal and reduced government funding levels

will have to meet the requirements specified in 30 CFR Subchapter R.

The AML agency controls every project specification from design, to

bidding, to final reclamation completion. The selection of reclamation

sites by the AML agency is based on the need to protect the public

health and safety and/or the environment from the adverse effects of

past mining activities. A particular site can be selected only after

the AML agency determines that private industry would be unable or

unwilling to remine and reclaim the site as a Title V operation, and

the State Attorney General or other legal officer certifies that the

project meets the eligibility requirements specified in State or Indian

Tribe counterparts to Title IV.

OSM is expressly prescribing certain procedures to ensure that the

provisions

[[Page 7473]]

of this final rule are implemented appropriately. First, the AML

agency, in consultation with the Title V regulatory authority,

determines whether the site is appropriate for AML reclamation

activities based on the likelihood of extracting the coal under a Title

V permit. Second, the Title V regulatory authority and the Title IV AML

agency have to concur on the boundaries of the AML project and on the

identification of incidental coal--that which is physically necessary

to remove to accomplish the approved reclamation.

J. What Will be the Consequence of AML Contractors Removing Coal

Outside the Limits Authorized by the AML Project?

AML contractors removing coal outside the limits authorized by the

AML project will be subject to contract remedies as deemed appropriate

by the AML agency. These can include termination of AML contracts,

forfeiture of any performance and reclamation bonds, or other remedies

provided by law for breach of contract. The AML agency will further be

expected to notify the Title V regulatory authority when any

unauthorized coal is removed.

Sometimes there is unintended and extremely limited removal of coal

beyond that which has been determined to be incidental to the project

that may not justify termination of the AML contract or bond

forfeiture. Further, when the amount of unauthorized coal removal is

less than 250 tons, the operation may be exempt from Title V permitting

requirements under 30 CFR 700.11(a)(2). We rely on the experience and

judgment of AML authorities, in consultation with Title V regulatory

authorities, as appropriate, to determine when a contractor has

exceeded the allowable limits for removal and sale of coal at an AML

project. The consequences of removing coal located outside the project

limits is discussed further at Section II of this preamble in the

response to question J: ``What must the contractor do under final

section 874.17(e) if extracting coal beyond the limits of the

incidental coal specified in section 874.17(b)?''

K. The Proposed Rulemaking

After substantial public outreach, OSM proposed rules on June 25,

1998 (63 FR 34768) with a 30-day comment period. The comment period was

reopened and extended on July 31, 1998 (63 FR 40871) until August 11,

1998, and reopened and extended again on September 3, 1998 (63 FR

46951) until September 18, 1998. No public meetings or hearings were

requested or held. OSM proposed to revise the definition of

``government-financed construction'' at section 707.5 and add a new

section 874.17 detailing procedures for AML construction projects

initiated under the scope of the new definition.

OSM received comments in response to the proposed rule from 21

commenters representing industry, State regulatory authorities, Federal

agencies, and environmental groups. OSM has reviewed each comment

carefully and has considered the commenters' suggestions and remarks in

preparing this final rule.

II. Response to Comments and Final Rule

The great majority of commenters generally supported the proposed

rule. Twelve commenters supported the proposal in whole or in part. Six

commented without supporting or opposing the proposed rule. And, three

objected to the proposed rule. The wide-ranging comment support

included such reasons as: the rule represents a sensible approach to

achieving greater AML reclamation at a lower cost; the rule would

permit greater flexibility needed to address reclamation problems that

are not being addressed under current rules; the rule would bring to

bear additional resources to remedy the effects of past mining,

including the numerous acid mine drainage problems occurring

nationwide; the rule would provide adequate safeguards, including sound

environmental protection safeguards, to ensure that it is applied only

in appropriate circumstances; and the rule would encourage on-the-

ground reclamation improvements at many AML eligible sites that

otherwise would not occur due to limited AML funding and the absence of

sufficient incentives to remine and reclaim such sites as Title V

regulated operations.

The three commenters objecting to the proposed rule asserted that

it was an incentive for remining--a process that involves Title V

regulated coal mining at previously mined sites where the original

operations left some coal in the ground, on the surface or in coal mine

waste piles. Our response to this assertion can be found in the answer

to question L. in Section II of this preamble: ``Is this rulemaking

really more about remining than AML reclamation?''

A. What is the Statutory Authority for the Final Rule?

Three sections in SMCRA outline the eligibility requirements for

sites being considered for funding under the AML program. They are

sections 404, 402(g)(4)(B)(I), and 402(g)(4)(B)(ii). Section 403 of

SMCRA establishes priorities for expenditures from the AML Fund on

eligible sites. An eligible site must then meet one of the five

priorities of Section 403(a)(1)-(5) in order to be funded.

Section 413(a) of SMCRA provides the Secretary with the ``power and

the authority, if not granted it otherwise, to engage in any work and

to do all things necessary or expedient, including the promulgation of

rules and regulations, to implement and administer the provisions of

this [Title IV].'' This final rule change is narrowly limited in its

application to the AML program and is necessary and expedient for OSM

and the States and Tribes to more efficiently and effectively carry out

the reclamation mandate established by Congress. This statutory

authority allows OSM to propose revisions to the AML program that will

provide States and Tribes the authority to reduce project costs to the

maximum extent practical on abandoned mine sites which have deposits of

coal or coal refuse remaining. Thus, the final rule will allow for more

program-wide reclamation for the same level of program funding.

In addition, Congress specifically provided under Section 528(2)

that SMCRA would not apply to activities involving the ``extraction of

coal as an incidental part of Federal, State or local government-

financed highway or other construction under regulations established by

the regulatory authority.'' Thus, Title V permitting requirements do

not apply to areas from which coal is extracted as an incidental part

of a government-financed construction operation. Because AML

reclamation projects are government-financed, they qualify as

government-financed construction under Section 528(2).

Each of the three opposing commenters challenged the legal

authority promulgating this rule. The first stated that the

congressional intent behind the Section 528(2) exemption was to

facilitate public works projects, including highway construction,

rather than projects authorized under Title IV. The second commenter

did not categorically exclude AML projects from the ambit of the

Section 528 exemption, but maintained that the elimination of the 50

percent funding requirement opened the exemption to ``all

construction'' in contravention to the intent of Congress (citing H.R.

Rep., No. 95-492, at 112 (1977)). The third commenter stated, without

support, his conclusion that OSM lacked legal authority for its rule.

In response to these commenters, OSM notes that the plain language

of Section 528(2) exempts the ``extraction of coal incidental to * * *

government-

[[Page 7474]]

financed highway or other construction * * * .'' While the legislative

history of this exemption does not indicate what ``other [government-

financed] construction'' Congress intended to exempt, the legislative

history is clear that Congress did not intend to exempt the broad brush

of private construction, i.e., the ``all construction'' referenced by

the second commenter. (See proposed rules, 43 FR 14672, September 18,

1978; citing to H.R. Conf. Rep. No. 95-493, at 112 (1977)). As the

legislative history of Section 528(2) indicates, Congress patterned the

exemption in some ways after the Pennsylvania Highway Law and was very

much concerned with ensuring appropriate government reclamation of

affected areas. (43 FR 14672, September 18, 1978; citing to H.R. 5988,

93d Cong. Sec. 203 (1973); 119 Cong. Rec. 1368 (January 18, 1973,

discussing Sec. 203 of H.R. 5988)).

Approved AML construction projects are consistent with the

constituent elements of the Section 528(2) exemption for the extraction

of coal incidental to government-financed ``other'' construction. These

AML projects are ``government-financed'' and, from start to finish,

government-initiated, government-approved, and government-monitored.

The only coal that can be extracted by these projects is that which is

incidental to the reclamation of the site and delineated in the AML

contract. In this regard, AML construction projects are not unlike

other government-financed construction, such as that of airports and

schools, for which the ``other construction'' exemption provision of

Section 528 has been recognized to apply. Even more than in airport and

school construction, the preeminent reclamation purpose of AML

construction projects satisfies congressional intent that exempted

government-financed construction projects address the reclamation

concerns of affected areas.

As early as 1980, the Secretary formally recognized the

applicability of the Section 528(2) exemption to the incidental

recovery of coal in conjunction with AML projects. (AML Guidelines,

Item B. 5., 45 FR 14810, March 6, 1980). Therefore, while the

application of the Section 528(2) exemption to AML construction

projects may not have been specifically envisioned by Congress twenty

years ago, such application is reasonable and consistent with what we

know from the legislative history of Congress' intent to exempt

``other'' government-financed construction from the provisions of the

Act.

B. What is the Amended Definition of ``Government-financed

Construction'' at Section 707.5?

OSM proposed to amend the definition of ``government-financed

construction'' in section 707.5 of the permanent program regulations to

allow less than 50 percent government funding from OSM or other AML

agencies for construction undertaken as an approved AML reclamation

project under Title IV of the Act when the reclamation involves the

incidental extraction of coal. A government agency includes a State or

Indian Tribe with an approved Title IV program under the definition of

agency found at 30 CFR 870.5. For those States and Indian Tribes that

do not have approved Title IV programs, a government agency means OSM

or its designated State agent.

AML reclamation projects are funded from several sources, including

private individuals who donate time and money, environmental groups,

utilities, industry and the government through the Title IV program.

Under the previous definition of ``government-financed construction,''

the government's financial share of the AML reclamation had to be at

least 50 percent of the total project cost. By reducing the required

government share for these AML projects, we anticipate that the final

rule will free up AML money to do reclamation that otherwise might

never be accomplished.

One commenter opposed the provisions of the proposed rule which

would allow less than 50 percent government funding when the

construction is an approved AML reclamation project. That commenter

cited the preamble to the 1978 rule, which originally proposed the 50

percent funding requirement, to support the claim that the funding

requirement serves to ``exempt only those projects in which the

government has a significant government interest.'' (Emphasis added by

commenter.) (43 FR 41672-3, September 18, 1978). The commenter also

viewed the funding requirement as fulfilling Congress' intent to limit

carefully and narrowly the scope of the Section 528(2) exemption.

However, in the preamble to the 1979 final rule, OSM acknowledged

that it had considered alternatives to lowering the 50 percent funding

requirement. In that preamble, OSM stated that little rationale had

been received in support of a lower percentage and that the only

example which had been given of a public benefit from such lowering was

a donated haul road. In that same preamble discussion, OSM indicated

that it believed there would be few instances in which the 50 percent

funding requirement would discourage construction that otherwise would

comply with a lower percentage. (44 FR 14949, March 13, 1979).

Now, some twenty years later, we fully support eliminating the 50

percent funding requirement for approved AML projects. Our rationale

is, to a large degree, based upon the unique governmental character and

protections associated with approved AML construction projects and the

substantial public benefit reasonably expected from the reclamation of

a considerable number of AML sites which would not otherwise be

reclaimed because of the prior 50 percent standard.

See the response to question B. in Section II of this preamble for

a discussion of OSM's statutory authority for eliminating the funding

requirement for approved AML projects. As amended, the section 707.5

definition for ``government-financed construction'' will continue to

narrowly limit the scope of the exemption in a manner which we believe

is consistent with the congressional intent of Section 528 of SMCRA,

the overall structure of SMCRA, and its goal of promoting the

reclamation of previously mined eligible areas.

Another commenter asked OSM to consider revising the proposed

definition in section 707.5 in a manner that would recognize that any

AML project which involves the incidental removal of coal is

government-funded construction, regardless of funding level and

technique. The commenter was concerned that in-kind payments such as

administrative expenses incurred by the AML agency in reviewing and

approving the project may not qualify as government funding and thus

preclude projects where there was no direct funding by the AML agency.

OSM assures the commenter that all expenses incurred directly or

indirectly by the AML agency, such as project design, project

solicitation and project management and project oversight qualify as

government funding under the section 707.5 definition based on long-

standing grants practice in the AML program. In light of this, OSM does

not believe there is a need to revise the proposed definition. The

definition of ``government-financed construction'' at section 707.5 is

adopted as proposed.

C. What Is the Change in Information Collection for Section 707.10?

OSM is revising section 707.10 which contains the information

collection requirements for Part 707. The revision changes the prior

justification for Part

[[Page 7475]]

707's exemption from the requirements of the Paperwork Reduction Act

(44 U.S.C. 3501 et seq.). The revised basis for this exemption is that

the information required to be maintained in section 707.12 consists

only of information that would be provided by persons in the normal

course of their business activities. No comments were received on

section 707.10, ``Information collection,'' and it is adopted as

proposed.

D. What Are the Information Collection Requirements for Section 874.10?

OSM is adding a section 874.10, which contains the information

collection requirements for Part 874 and the Office of Management and

Budget (OMB) clearance number. The addition includes the estimated

reporting burden per project for complying with the new information

collection requirements contained in the final rule.

One commenter suggested that OSM's estimate of 27 hours for the

burden of the proposed collection of information under the requirements

of the proposal was too low. The commenter suggested 60 hours was a

more reasonable estimate and we have accepted this figure in the final

rule at section 874.10, ``Information collection.''

E. What is the Purpose Behind New Section 874.17: ``AML Agency

Procedures for Reclamation Projects Receiving Less Than 50 Percent

Government Funding?''

This new section outlines the procedures an AML agency will need to

follow in approving AML projects receiving less than 50 percent

government funding because of planned coal extraction incidental to the

reclamation. Its intent is to ensure that the revised definition of

``government-financed construction'' at 30 CFR 707 is applied only when

appropriate to achieve reclamation at AML-eligible sites.

Several commenters agreed with OSM that sufficient safeguards exist

to ensure the procedure is used only in appropriate circumstances.

Another acknowledged that it will now be incumbent upon both the States

and OSM to implement the rule in a professional and responsible manner.

These comments are consistent with our belief that the experience and

safeguards of the AML program, combined with OSM's oversight role, will

prevent abuse of the provisions in this rule. Again, we emphasize that

States--not contractors or operators--select projects, solicit bids and

decide whether to award contracts.

Two commenters opposed the rule citing a potential for substantial

administrative abuse. One commenter quoted OSM's 1978 justification for

proposing the 50 percent funding requirement as minimizing the

opportunity for this abuse. Both commenters looked to the history of

SMCRA as providing examples of how its provisions had been abused and

such abuse had been tolerated by regulatory authorities. Each commenter

saw every reason to expect that regulatory authorities would

participate in such abuse in the future.

OSM is very much aware of the pressure for regulatory authorities

to apply this rule in such a way as to maximize AML reclamation by

maximizing coal extraction. It was for this reason that OSM added to

its original outreach document the consultation and concurrence

requirements of section 874.17(a) and (b) and the documentation

requirements of section 874.17(c) which added an element of personal

accountability to the required determinations and decisions.

Notwithstanding, OSM has every reason to believe that the Title IV

authorities will continue to properly implement their programs as they

have done in the past. Should OSM discern a problem with program

implementation, we will address that problem through oversight.

With regard to the commenter's reference to OSM's 1978

justification for the 50 percent funding requirement, we note that the

same pressures to maximize coal extraction exist under both the prior

and present rule. Yet the present rule, objected to by the commenters,

provides significantly less potential for abuse than the prior rule in

that it provides for the section 874.17 protections not found in that

prior rule.

The introductory paragraph of section 874.17, ``AML agency

procedures for reclamation projects receiving less than 50 percent

government funding,'' is adopted as proposed. Paragraphs 874.17(a)

through (e) are discussed in the sections that follow.

F. How Will the Consultation in Section 874.17(a) Work?

The consultation process under 874.17(a) requires the AML agency to

consult with the regulatory authority to determine the likelihood of

the coal at a proposed AML project being mined under a Title V permit.

The purpose of this consultation is to ensure that the AML program and

funds are not used for activities that should properly be permitted and

regulated under Title V. Through this consultation process OSM seeks to

ensure that AML funds are directed only to eligible sites.

OSM believes the information upon which the ``likelihood of the

coal being mined under a Title V permit'' determination is made should

be information that is reasonably available. In both our proposed and

final rules, we have listed certain kinds of information that we

believe would be available and helpful in reaching a decision on

whether or not to proceed with the project under the AML program. These

examples of ``available'' information are not exhaustive. Each site

will present a different set of circumstances and problems which are

best addressed on a case-by-case basis. We believe it best to leave to

the experience and technical and professional judgment of the Title IV

and Title V officials within each jurisdiction to decide if an

abandoned mine should be remined under a Title V permit or reclaimed

under the AML program. We will continue to monitor those decisions

through our oversight of the respective State programs.

Under this section, the AML agency also will consult with the

regulatory authority to determine the likelihood for potential problems

and impacts arising between Title IV reclamation projects and any

adjacent or nearby Title V operations. The purpose of this provision is

to identify environmental problems at an early stage and to establish

reclamation responsibility. An example of where reclamation

responsibility needs to be established is where a hydrologic connection

exists between nearby or adjacent Title IV and Title V activities. In

such cases where there is acid mine drainage, OSM believes it is

essential to ensure that responsibility for acid mine drainage arising

from a permitted Title V activity but impacting a Title IV activity

remains with the Title V permittee. Conversely, a Title V permittee

would not be held responsible for any environmental problems

originating from a nearby or adjacent Title IV reclamation activity

impacting the Title V activity.

One commenter suggested that this section be amended to include

consideration of economic factors which limit the development or

marketing of the coal resources as an active mining venture.

OSM recognizes that economics related to environmental risks,

permitting costs, regulatory compliance costs, quantity and quality of

the coal as well as development and marketing issues are all important

factors leading to a decision by a coal operator to mine or not mine

under a Title V permit. A rough economic analysis is not precluded by

the regulatory language.

[[Page 7476]]

The AML agency and regulatory authority are free to use any information

and analyses, including an economic analysis, that they consider

appropriate to reach and support their section 874.17 decisions. On the

other hand, a thorough economic analysis would be costly, and the

information needed for its preparation would not always be readily

available. In light of these considerations, we are not requiring an

economic analysis in the final rule.

The same commenter suggested that a finding be made during the

consultation as to the likelihood that the project will aid in

correcting existing off-site environmental damage caused by on-site

problems, such as discharge of acid mine drainage. Because AML

authorities already factor such considerations into their project-

selection decisions, we see no reason to require an additional step in

the consultation process.

Another commenter was encouraged that the ultimate determination of

whether an abandoned mine site should be remined under a Title V permit

or reclaimed under the Title IV AML program would be left to the

experience and technical and professional judgment of State officials.

This commenter, and one other, further expressed the hope that, under

OSM's oversight of State programs, OSM would not be second-guessing

State determinations about the likelihood that sites would be mined

under Title V. One of these commenters further questioned whether, if

OSM were to reverse a State determination, the State would then

disallow the AML funding and cite the contractor for mining without a

permit?

State authorities will have to make determinations under this rule

based on experience, professional judgment, and the best available

information. OSM does not intend to second-guess individual decisions

by State Title IV authorities. Our approach to oversight will be to

review first the State determinations, as documented under paragraph

(c) of this section, to find out whether there is a pattern of

questionable State determinations and, if there is such a pattern, to

look into the reasons before deciding what remedial action would be

appropriate. This is consistent with OSM's overall approach to

oversight of State programs under SMCRA. Even if we were to determine

that a State is not properly implementing this rule, there would be no

basis for OSM to take action against a contractor who, in good faith,

is and has been complying with all terms and conditions of the

contract. Instead, our focus would be on working with the State to

correct any program deficiencies.

One commenter indicated that the waiver of AML reclamation fees was

key to offsetting some fairly significant risks to contractors in

taking on an AML project under this rule. Among the risks noted by the

commenter were the quantity and quality of the incidental coal,

negotiation of a lease and associated royalty payments, potential

bonding requirements, and the responsibility to complete the project

regardless of the return on the sale of the incidental coal. The

commenter believed it might be necessary to consider ``additional

adjustments'' in the final rule in order to encourage contractors to

undertake this type of project.

OSM realizes that there is a significant factor of operator risk in

any AML reclamation contract whether or not it involves the incidental

extraction of coal. However, when there is risk of loss there is also

potential for gain. Contractors who are uncomfortable with site-

specific risks inherent in individual reclamation contracts should not

bid on the contract. The final rule is built upon the basic elements of

a standard AML contract. OSM will not consider adjustments to any of

these basic elements to encourage operators to undertake reclamation

projects. Concerning the comment on the waiver of AML fees, the payment

of AML fees has never been required of contractors extracting coal

under a Section 528(2) exemption.

Another commenter suggested that it was unfair to hold the

contractor responsible for completing the AML work if the project was

begun with a reliance on agency estimates of coal amount, quality,

location, marketability, etc., that turned out to be miscalculated or

otherwise in error. The commenter also asked if OSM would amend the AML

contract if any material miscalculations were discovered.

This commenter misinterprets the proposed rule to mean that

contractors will have to rely upon AML estimates of amount of coal,

quality of coal, etc.. Under this rule, the AML agency will establish

and describe the limits of the incidental coal to be removed and any

other information it has about the deposit. If the AML agency drills

the site as part of its determination of what coal is incidental to the

project, that information will be provided to interested contractors.

But as in any arms-length transaction, it behooves both sides to assure

themselves that they have sufficient accurate information to enter into

a contract. Contractors submit bids based on their own cost-benefit

considerations. Likewise, AML agencies select and reject bids based on

whether they are in the best interest of the agency. Once a contract is

executed, however, each party is bound by the terms and the conditions

of the contract. Contract amendments can take place if approved by the

AML agency for extraordinary circumstances. However, we stress that we

see no valid reason for modifying the contract because of the

contractor's incorrect estimate of either the amount of coal at the

site or its ultimate value.

One commenter asserted that the determination in section

817.74(a)(1) as to the likelihood of the site being mined under a Title

V permit could not properly be made outside the context of the baseline

hydrologic, geologic and coal reserve information normally submitted as

part of a Title V permit application.

OSM does not agree that a reasonable ``likelihood'' determination

cannot properly be made on the basis of available (a)(1) information.

On occasion, however, the AML agency may consider that available

documentation on coal reserves needs to be augmented, for example, by

the drilling of core samples. We expect that the results of such

drilling would be shared with contractors.

One commenter asserted that the rule is deficient in not being

``need-tested,'' namely that there is no requirement for the

``operator'' to demonstrate that the reclamation would not otherwise be

accomplished under a viable Title V operation.

OSM interprets this comment as a proposal to change the

``likelihood'' test into a ``never-ever'' test. Such a proposed

limiting or narrowing of the ``likelihood'' determination would negate

the very purpose of this rulemaking by discouraging reclamation under

Title IV while doing nothing to increase the likelihood of reclamation

under Title V. In addition, this suggestion would essentially create a

requirement that a contractor know other companies' trade secrets with

which it would be impossible to comply. Section 874.17(a),

``Consultation with the Title V Regulatory Authority,'' is adopted as

proposed.

G. What Types of Concurrences Between the AML Agency and the Regulatory

Authority Will be Required in Section 874.17(b)?

Under proposed section 874.17(b), if the AML agency would have

decided to proceed with the reclamation project after consulting with

the Title V regulatory authority, then the two

[[Page 7477]]

would have had to concur in determinations as to: (1) the extent and

amount of any coal refuse, coal waste, or other coal deposits, the

extraction of which would be covered by the Part 707 exemption or

counterpart State and Tribal laws and regulations, and (2) the

delineation of the boundaries of the AML project. These determinations

primarily were intended to ensure that only the amount of coal

physically needed to accomplish the reclamation is covered by the Part

707 exemption. This coal would be ``incidental'' and exempt from the

reclamation fee payment.

One commenter suggested that the rule should have included a

provision that allows the contractor to amend or revise the boundaries

of the AML project where conditions or circumstances warrant the

removal of additional coal as long as the coal is incidental to the

reclamation. Another commenter suggested that a provision be included

for amending the determination on the amount and extent of incidental

coal if additional coal is found to be incidental to the reclamation.

OSM does not accept either of these suggestions. As with any AML

reclamation project, the contractor can propose contract revisions

based on unusual or unanticipated conditions experienced on the site.

However, only the AML agency has the authority to revise or amend the

contract. Because the AML agency already has this authority, OSM does

not see the need for specifically providing for it through a new rule

provision.

Two commenters suggested increasing the number and scope of the

required Title V concurrences. The first proposed to replace the

existing concurrence on the extent and amount of incidental coal with

one on the estimated contractor revenues from the sale of that coal.

This was seen as more appropriate because revenues from coal sales are

to be used to offset project costs. The second comment proposed

requiring Title V concurrence on all contract amendments.

OSM considered but did not accept either of these suggestions. The

principal reason for involving the Title V authority in the paragraph

(b)(1) concurrence process is to secure the greatest assurance that the

limits of incidental coal are correctly identified. As discussed

elsewhere in this rulemaking, precise estimates of contractor returns

require company-specific information not available to either OSM or

State authorities. All that is needed by the AML agency for the

purposes of this rule is a rough estimate of contractor returns to set

the range of expected contractor bids on the project. Requiring a Title

V concurrence on this process is not necessary and would divert limited

agency resources away from addressing more crucial information needs.

For similar reasons, OSM did not accept the second proposal that

Title V concurrence be required for amendments to the reclamation

contract. One of the principal purposes of the rule is secured by

involving the Title V authority in the initial determination of the

contract limits of incidental coal. Once this has occurred, the AML

authority should have little or no difficulty when considering

amendments affecting the determination of incidental coal. Requiring

concurrence of the Title V authority in subsequent revisions to the

contract, including adjustments to the limits of incidental coal, would

be of little benefit. If the AML authority decides there is a need to

discuss a contract amendment with the Title V authority, the AML

authority is free to seek such advice.

Several comments focused on the language of proposed (b)(1) which

would have required specification of the ``amount'' of coal that could

be extracted under the Part 707 exemption. This ``amount''

specification was complicated by the language of proposed (e) which

would have required a Title V permit in cases where a contractor

extracts ``more coal than specified in (b)(1).'' Read together, these

paragraphs appeared to require a Title V permit if more coal was

extracted than the extent and amount specified in the Title IV and

Title V concurrence. Commenters not only suggested that such language

would require AML auditing of company books but also offered opinions

on the senselessness of tonnage measurements. Other comments

interpreted the proposed (b)(1) and (e) language as requiring AML audit

of tonnage figures, company sales and net revenue figures.

OSM never intended the proposed paragraphs (b)(1) and (e) language

to require a Title V permit for the extraction of any amount of coal

that lies within the incidental coal limits specified under (b)(1).

Instead, OSM intended that the language would only require a Title V

permit for coal extracted beyond those limits. The ``extent'' or limits

of incidental coal can reasonably be defined in terms of the dimensions

of the area containing the coal. Exact determination of tonnage within

these dimensions would, in most cases, be impossible to achieve prior

to removing the coal.

To eliminate any ambiguities that may have appeared in the proposed

(b)(1) rule language, the final rule replaces the phrase ``extent and

amount'' with the word ``limits''. The remainder of section

874.17(b)(1) and (2), ``Concurrence with the Title V Regulatory

Authority,'' is adopted as proposed.

Final section 874.17(b)(1) reads:

You [the AML authority] must concur in a determination of the

limits on any coal refuse, coal waste, or other coal deposits which

can be extracted under the Part 707 exemption or counterpart State/

Indian Tribe laws and regulations.

For information on conforming changes to section 874.17(e), see the

response to question J. in Section II of this preamble: ``What must the

contractor do under final section 874.17(e) if extracting coal beyond

the limits of the incidental coal specified in section 874.17(b)?''

H. Under Section 874.17(c), How Will the AML Agency Document the

Results of the Consultation and the Concurrences With the Title V

Regulatory Authority?

Under the proposed and final rules, the AML agency documents, in

the AML case file, the determinations as to the likelihood of coal at

the site being mined under a Title V permit and the likelihood of

interactions between AML activities and nearby or adjacent Title V

activities that might create new environmental problems or adversely

affect existing situations. Also, the AML agency documents the

information used for making these determinations and the names of the

responsible agency officials.

As we received no comments on section 874.17(c), ``Documentation,''

it is adopted as proposed.

I. What Special Requirements Will Apply for Qualifying Section

874.17(d) Reclamation Projects?

Under the proposed and final rule, section 874.17(d)(2) expressly

requires that qualifying AML reclamation projects comply with

provisions for State and Tribal reclamation plans and grants found at

30 CFR Subchapter R. The required compliance with Subchapter R is

intended to ensure that the incidental coal extraction projects

authorized under this rulemaking is accomplished in accordance with the

substantial safeguards of the AML program. These safeguards include

such features as: public participation and involvement; environmental

evaluation to achieve compliance with the National Environmental Policy

Act of 1969; and use of appropriate State or Tribal procurement

procedures and regulations

[[Page 7478]]

as authorized under the grant common rule at 43 CFR 12.76.

Further, to provide increased protections to the AML fund and to

citizens or landowners who might be affected by the project, we

proposed three additional requirements to qualifying section 874.17

reclamation projects. These three proposed requirements, with only a

minor wording adjustment in paragraph (d)(4) discussed below, are

included in the final rule. Paragraph (d)(1) requires the AML agency to

characterize the site in terms of existing hydrologic and other

environmental problems. Paragraph (d)(3) requires the AML agency to

develop site-specific reclamation and contractual provisions, such as

performance bonds, to ensure that the reclamation is completed. And,

paragraph (d)(4) requires the contractor to provide documents that

authorize the extraction of the coal and commit to the payment of

royalties to the mineral owner or other appropriate party.

The purpose of the (d)(4) requirement is to ensure that before a

reclamation contract is awarded, there will be a valid coal lease

authorizing the contractor to extract the coal. The terms of the lease

will identify the party responsible for paying the royalty, the amount

of the royalty, and the party receiving the royalty. To make the rule

language clearer, we are including in final (d)(4) the qualifying

phrase that the contractor provide, ``prior to the time reclamation

begins,'' applicable documents that clearly ``commit to the payment of

royalties.''

One commenter indicated that the documentation requirements of

section 874.17(d) must be interpreted as requirements for the AML

program and not as information to be supplied in lieu of a mining

permit. The commenter reasoned that the goal of the AML program is to

improve existing environmental conditions and not just to protect or

preserve existing conditions. OSM agrees with the commenter on both

points.

Two other commenters raised issues regarding the payment of

royalties, severance taxes and related obligations. The first wanted to

ensure that the AML contractor secure a mineral lease and/or pay

associated royalties, particularly for Federal and State coal. The

second raised the question of the proof of payment for such ``other''

fees as severance and black lung taxes.

In response to both these commenters, we emphasize, as we have done

in the proposed rule and elsewhere in this final rule, that this

rulemaking is not intended to change, alter, or supersede any other

Federal or State laws, regulations, or requirements that apply to all

AML reclamation projects. The requirement for a Federal or State lease

and the payment of Federal or State royalties is unaffected by this

rule. Also, any requirements for proof of payment for severance and

black lung fees--fees which are not required under SMCRA--are

unaffected by this rule.

A final commenter raised the question of whether the (d)(4)

documentation authorizing coal extraction (e.g., a lease) would be

required before or after project bid submission. OSM believes that

requiring the paragraph (d)(4) documentation before the reclamation

actually begins will provide the greatest latitude to parties

interested in bidding on the AML reclamation projects. As indicated

earlier, we have further revised final (d)(4) to include the qualifying

phrase ``prior to the time reclamation begins'' to reflect this

intention. In all other ways, final section 874.17(d), ``Special

requirements,'' is adopted as proposed and now reads:

(d) Special requirements. For each project, you must:

(1) Characterize the site in terms of mine drainage, active slides

and slide-prone areas, erosion and sedimentation, vegetation, toxic

materials, and hydrologic balance;

(2) Ensure that the reclamation project is conducted in accordance

with the provisions of 30 CFR Subchapter R;

(3) Develop specific-site reclamation requirements, including

performance bonds when appropriate in accordance with State procedures;

and

(4) Require the contractor conducting the reclamation to provide

prior to the time reclamation begins applicable documents that clearly

authorize the extraction of coal and payment of royalties.

J. What Must the Contractor do Under Final Section 874.17(e) if

Extracting Coal Beyond the Limits of the Incidental Coal Specified in

Section 874.17(b)?

In proposed and final section 874.17(e), the contractor is required

to obtain a permit under Title V for the extraction of any coal not

included in the paragraph (b)(1) Part 707 exemption. Such coal is not

incidental to the AML reclamation project and thus is subject to all

the regulatory requirements of Title V.

One commenter asked what OSM would do if, after a contract is

signed, the lessor and contractor wanted to take out additional coal

underlying the coal determined to be incidental to the project and

possibly provide more complete reclamation in the process. Would OSM

consider the additional coal extending beyond the established project

limits to be incidental because its removal could improve the

reclamation, or would OSM consider the coal non-incidental and expect

the contractor to obtain a Title V permit?

This is an important issue, and we want to clarify how it must be

addressed under the final rule. All coal extracted beyond the limits of

the incidental coal identified in the AML contract, regardless of where

it is found relative to the incidental coal, is subject to Title V

requirements, including obtaining a permit and payment of reclamation

fees. Once the contractor begins work on the project and the AML

authority subsequently determines that additional coal is incidental to

the project, the contract could be amended to include the additional

coal. The standard for determining incidental coal is always whether

removal or extraction is physically necessary to accomplish the

reclamation of the approved AML construction project. This standard

must be applied in the initial contract determination and in any

amendments that change the contract limits of incidental coal. Any coal

whose removal or extraction is not physically necessary to complete the

reclamation is not incidental to that project--even if such removal and

sale would reduce the overall cost of the reclamation to the

government.

One commenter suggested that the preamble discussion in the

proposed rule (question K. in Section II of the preamble to the

proposed rule) providing for contract remedies against AML projects for

the extraction of coal outside of the section 874.17(b)(1) project

limits, conflicted with the proposed rule language of section 874.17(e)

requiring a Title V permit for such extraction. While several

commenters read the proposed rule language of paragraphs (b)(1) and (e)

as establishing a tonnage limit on the amount of incidental coal that

could be extracted from the AML project (with a Title V permit being

required for coal exceeding the tonnage limit), most commenters

appeared to correctly interpret these paragraphs to mean that the

limits on incidental coal would be identified and described in terms of

dimensions of the area containing the coal. A Title V permit would not

be needed to extract coal within these prescribed limits, regardless of

how much coal is extracted or the quality and value of the coal. To

make it clear in this final rule that paragraph (e) requires a Title V

permit only for the extraction of coal beyond the paragraph (b)(1)

limits, we are making the following clarifying changes to that

paragraph.

[[Page 7479]]

Final paragraph (e) replaces the word ``more'' in front of the word

``coal'' with the phrase ``beyond the limits of the incidental

[coal].'' The rule language concludes with the addition of the new

phrase ``for such coal.'' This change should clarify that extraction of

coal beyond that which has been determined to be incidental to the

project under (b)(1) is unauthorized and, thus, requires a Title V

permit. At the same time coal extracted within the (b)(1) limits,

regardless of how much or how valuable, is incidental and, therefore,

authorized under the project.

Final section 874.17(e) reads:

If the reclamation contractor extracts coal beyond the limits of

the incidental coal specified in paragraph (b)(1) of this section,

the contractor must obtain a permit under Title V of SMCRA for such

coal.

Two commenters suggested an auditing or final adjusting of contract

cost to net revenues in lieu of the proposed regulatory requirement to

seek a Title V permit if the contractor extracts more coal than

authorized in the AML contract. One of the commenters believed that

this was fairer, more effective and would not halt the AML project if

the contractor could not obtain a permit or delay it until such time as

the contractor obtained a permit. These and other commenters proposed

alternative remedies, procedures, and sanctions to the paragraph (e)

requirement that a contractor obtain a Title V permit for extraction of

coal beyond the incidental coal limits of (b)(1).

As previously mentioned, OSM recognizes that there are times that

unintended and extremely limited extraction of coal may occur beyond

prescribed (b)(1) limits. To the extent that such coal is less than 250

tons, the extraction may be exempt from regulation under the Title V

permitting requirement at 30 CFR 700.11(a)(2). Failing that exemption,

the Act allows no leeway in the requirement for Title V permitting. To

be reasonably assured that coal removal will not exceed the incidental

coal limits of (b)(1), contractors should design projects accurately

and precisely and pay close attention to project boundaries and

incidental coal limits when undertaking the project.

We note that the paragraph (e) requirement that the contractor must

obtain a Title V permit does not preclude the AML agency from imposing

contract sanctions under the Title IV program if the contractor

breaches the conditions of the contract. As indicated in the preamble

discussion following question K. in Section II of the proposed rule,

AML contractors removing coal beyond the limits authorized by the AML

project could be subject to a wide range of remedies for breach of

contract. Such sanctions are already available to the Title IV agency

to use at its discretion to ensure that reclamation is conducted fully

in accordance with applicable laws, regulations and contract

requirements. Indeed, when a contractor clearly exceeds the (b)(1)

incidental coal limits, OSM expects that the AML agency would impose

appropriate sanctions, as well as refer the matter to Title V

authorities for appropriate action. Hence, we have not adopted any of

the suggested rule changes that would have limited the available

remedies or sanctions.

K. How Does This Rulemaking Relate to the Established AML Priority

System for Selecting Projects?

OSM received several comments concerning the relationship to the

priorities established in Section 403 of SMCRA relative to projects

involving the incidental recovery of coal. One of these commenters

encouraged OSM to add a paragraph (d) under section 874.17 titled

``Project Priority,'' the purpose of which would be to remind the

States that the selection of projects shall reflect the priorities

outlined in Section 403 of SMCRA regardless of whether or not there is

coal recovery potential. This commenter suggested that such an advisory

statement would help States defend their project selection process

against political or business pressure to fund certain sites with coal

recovery potential. At the same time, the commenter suggested, an

advisory statement would not preclude States from approving low

priority projects where coal recovery potential allows reclamation to

be performed at little or no cost to the government.

Another commenter indicated that the discussion in our proposal (63

FR 34770; June 25, 1998) suggested that the AML agency could select

sites independent of the priority ranking. The commenter recommended

that OSM clarify that the rule provides the State AML agency with the

authority to depart from the priority system in order to speed approval

of the incidental coal removal projects developed under this rule.

A third commenter was encouraged by OSM's recognition that the

types of AML projects likely to attract most attention under this rule

are those listed as priority 3 under Section 403 of SMCRA. This same

commenter was encouraged again that the rule does not mandate that the

States approve all AML projects presented to them which involve less

than 50 percent government funding.

OSM certainly did not intend by anything said in its proposed rule

to suggest that States disregard the established priority system. In

our proposed rule, we expressly stated that, ``The AML agency selects

individual sites from the AML Inventory using its priority system.''

(63 FR 34771; June 25, 1998).

OSM further does not believe that there is need to add an advisory

regulation to clarify the priority structure. Projects done under

authority of this rule will not differ from any other AML project with

regard to Section 403 of SMCRA. The States have been administering

quality AML programs since the early 1980's. Political or business

pressure in project selection has always been part of the process, and

there is every reason to believe that such pressure can be expected

here. While individual projects selected may be priority 1, 2 or 3,

depending on the State's needs and the amount of AML reclamation

remaining to be done, individual projects are approvable as long as

they reflect, within the context of other AML projects, the priorities

outlined in Section 403. States will retain the maximum discretion in

choosing AML projects consistent with their current authority in

Section 403.

One commenter believed that OSM's statement that, ``The proposal

was not intended to address project sites involving redisturbance and

subsequent reclamation of abandoned mine lands, such as highwalls and

outslopes that have become environmentally stable over the years and

pose no other problems'' provides a significant obstacle to reducing

the current AML inventory through reclamation. OSM disagrees with the

commenter. Section 403 of SMCRA states that, in addition to the

eligibility criteria for AML reclamation found at Section 404, sites

must meet one of the priorities at Section 403. If an abandoned mine

site has become stable over the years, it would not meet the priorities

in Section 403 and it would not be subject to expenditures from the AML

fund. Such a site could properly be removed from the inventory at the

State's discretion.

L. Is This Rulemaking Really More About Remining than AML Reclamation?

No. The three commenters opposing the rule asserted that it was a

thinly veiled remining incentive. They uniformly decried what they

perceived to be the loss of Title V remining

[[Page 7480]]

protections for operations that they suggested would be conducted as

Title IV reclamation projects under this rule. Much of commenters'

concerns centered on their assertion that the rule would lead to

administrative abuse and operate as a remining incentive. One of the

three commenters asserted that the rule was a remining incentive

because it would lead to ``coal mining for commercial profit'' as part

of a government-financed operation.

OSM has already addressed commenters' concerns about abuse of the

rule in Section II.E. of this preamble. With regard to the commenter's

concern that the rule would serve as a remining incentive because it

would lead to ``coal mining for commercial profit,'' we note that

Section 528(2) exempted operations can include the extraction of coal

for commercial profit. Profit is not in conflict with the goal or

intent of Section 528(2). This rule is not a remining incentive. It is

intended to encourage the reclamation at AML-eligible sites that have

little-to-no likelihood of ever being remined.

The commenter's concern that operators might ``mine'' coal for

``commercial profit'' under this rule is balanced by industry

commenters' often voiced concern over the same potential for

``commercial loss.'' As under any AML reclamation contract, whether or

not it involves the extraction of coal, there will always be an element

of risk for the bidding party. OSM neither guarantees a profit nor

insures against a loss for reclamation contracts. OSM's primary

interest, particularly for the reclamation conducted under this rule,

is in negotiating a contract that reflects a savings from the

anticipated program costs of reclaiming the site and burying or

disposing of the incidental coal deposits. Such savings will in turn be

used to reclaim other eligible sites.

This same commenter challenged the justification for the rule on

the basis of ``remining incentives'' already on the books. The

commenter cited: (1) the Clean Water Act Reauthorization of 1978, and

(2) the Energy Policy Act of 1992. Effective as these incentives may

have been in encouraging Title V remining, substantial acreage remains

unremined with little likelihood of being remined under existing

regulations. It is these sites that this final rule targets for Title

IV reclamation.

The same commenter also characterized the rule as using AML funds

to improperly subsidize the remining industry. The commenter cited

Congress' prior rejection of such a subsidy in the legislative history

of the Energy Policy Act of 1992. Although no specific citation was

provided, the commenter probably was referring to the provisions of

House Bill 4053, which created a State remining insurance fund derived

mainly from AML monies. This fund would have assumed a Title V

permittee's liability for correcting environmental problems that

resulted from unanticipated events or conditions. H.R. 4053, 101st

Cong. Sec. 422 (1990). The concern expressed in hearings over these

provisions was that a few problem sites could deplete the entire fund.

Coal Remining: Hearings on H.R. 2791 and 4053 before the Subcommittee

on Mining and Natural Resources, 101st Cong. at 181,187 (1990)

(Statements of Dave Rosenbaum and Nick J. Rahall.)

Beyond the fact that the present rule concerns Title IV reclamation

and not Title V remining, we note that the rule does not threaten to

exhaust AML funds on Title V reclamation, but rather is a means of

maximizing existing AML funds for Title IV reclamation. It could be

better said that this rule does not subsidize industry but, under

controlled parameters, uses industry to subsidize AML reclamation.

Another commenter suggested that the proposal be withdrawn and that

OSM explore other approaches to the creation of ``remining''

incentives. Several incentives were proposed which, because they dealt

with remining and not AML reclamation projects, were beyond the scope

of this rulemaking. We note, however, that the commenter's suggested

remining incentives (1) would require congressional action in the form

of statutory changes or appropriations, or (2) were conditioned with

such caveats so as to render them ineffective as incentives to the coal

industry. These recommended incentives highlight the difficulty

encountered over the last twenty years by industry, OSM, and the

environmental community in developing meaningful, environmentally

protective, mutually supportable remining incentives. As a result, an

enormous number of disturbed sites have yet to be remined and reclaimed

under Title V. We are promulgating the current rule in an effort to

encourage the Title IV reclamation of some of those sites.

Following the prior theme from commenters that the rule is not a

reclamation procedure but a remining incentive, one commenter listed

seven areas in which projects authorized under this rule, although

providing Title IV protections, did not provide Title V level

protections. This less than Title V level of protection is not

unexpected considering that projects authorized under this final rule

are AML reclamation projects and not Title V activities. AML

reclamation has been successfully performed under SMCRA for 20 years

complying with numerous AML program and AML contract safeguards. The

commenter has, in effect, made a broad sweeping condemnation of the AML

procedures inherent to all reclamation projects, including those that

would be initiated under the scope of this final rule. At the same

time, despite OSM's detailed explanations of the safeguards in the

preamble to the proposed rule, the commenter did not specifically cite

which AML safeguards are deficient or have proved inadequate in the

past and did not offer suggestions on how they could be strengthened.

M. Other Comments

One commenter supporting the rule characterized it as a further

step in implementing primacy under SMCRA. This commenter correctly

noted that a State's adoption of this rule and the resulting change in

reach of its AML program is optional. Each State is free to manage its

AML program in light of its particular needs and resources.

The three commenters categorically opposing the rule also attacked

it as lacking adequate justification. Two of the commenters asserted

that OSM was not justified in seeking new ways of funding the

reclamation of acreage that otherwise would not be reclaimed because

there was still a ``significant sum of [AML] money unexpended in the

treasury and unrequested by OSM.'' The commenters were referring to the

unappropriated balance in the AML Fund--more than $1 billion collected

in AML fees and deposited in the Fund but not appropriated by Congress

for reclamation. These and other commenters expressed support for

making all Fund money available for reclamation.

This comment is outside of the scope of this rulemaking, and it

refers both to an agency budget request and a congressional

appropriation process over which OSM has little control. Further, if

every dollar in the Fund were to be appropriated for reclamation, it

would not come close to satisfying the reclamation need. Even if the

entire Fund became available for reclamation, this final rule would

still be necessary.

One of these commenters stated that OSM had not provided any

figures showing how many additional abandoned mines would be reclaimed

under the proposal and demonstrating that the rule would have tangible

environmental benefits. While projections of the exact number of sites

[[Page 7481]]

that would be reclaimed as a result of this new rule cannot be reliably

made, OSM has information from 15 States that collectively estimated

that a range of from 32 to 80 sites per year could be reclaimed under

this rule.

One commenter asked for confirmation that the proposed change in

the definition at section 707.5 would not affect the review

responsibility to identify historic properties and effects under 36 CFR

800. That commenter also suggested that it would be helpful to consider

coordination measures for AML and regulatory agencies to perform the

needed reviews and to avoid redundancy. This rule does not change any

existing requirements in the Title IV AML program or procedures and

thus will not change existing review requirements for historic

properties. Changes in coordination procedures, if any, will be left to

the discretion of the individual States.

One commenter expressed the idea that the enhanced reclamation

scope of the rule leaves open for interpretation and possible

reevaluation of the procedures for State contracting and bonding.

Again, we emphasize that reclamation projects covered under the scope

of this rule making are intended to be accomplished within existing AML

processes and procedures. This final rule does not change, alter or

supercede any other Federal or State laws, regulations or requirements

that would otherwise apply to the AML projects. At the same time, it

does not preclude States from revising any procedures in order to

better implement the provisions of this final rule.

III. Procedural Determinations

1. Executive Order 12866--Regulatory Planning and Review

This document is a significant rule and has been reviewed by the

Office of Management and Budget under Executive Order 12866.

a. This rule will not have an effect of $100 million or more on the

economy. It will not adversely affect in a material way the economy,

productivity, competition, jobs, the environment, public health or

safety, or State, local, or Tribal governments or communities.

b. This rule will not create a serious inconsistency or otherwise

interfere with an action taken or planned by another agency.

c. This rule does not alter the budgetary effects or entitlements,

grants, user fees, or loan programs or the rights or obligations of

their recipients.

d. This rule does raise novel policy issues.

2. Regulatory Flexibility Act

The Department of the Interior certifies that this rule will not

have a significant economic impact on a substantial number of small

entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

The rule, when implemented, should slightly improve business

opportunities for all entities, small and large, by increasing the

likelihood that between 32 and 80 additional reclamation projects will

be undertaken each year. In February 1997, a survey of 15 States,

conducted by the National Association of Abandoned Mine Land Programs,

indicated that if the proposal were implemented, 13 States intended to

use the provisions to achieve reclamation of problem areas such as coal

refuse, dangerous highwalls, AMD, and subsidence. Of those States, 12

anticipated one to five projects per year, while one State anticipated

20 or more. Therefore, OSM estimates a range of from 32-80 additional

projects per year that will be undertaken as a result of the new rule.

In calendar year 1997, there were 476 AML reclamation projects approved

and in calendar year 1998, there were 460. This results in an average

of 468 projects per year for this two year period. Therefore, it is

anticipated that the average number of AML projects under the new rule

will increase from 468 to a low of 500 and a high of 548 projects per

year, or an increase of between 6.8 and 17.1 percent.

Data from OSM's electronic Applicant Violator System indicates that

since July 1994, we have cleared approximately 724 businesses as

contractors for AML reclamation projects. While it is likely that some

of the 724 business were coal mining companies which we classify as

small businesses under the Small Business Administration (SBA)

criteria, some were also construction companies, landscape companies,

and other types of businesses with the heavy equipment necessary to

reclaim an abandoned coal mine site. Since we do not collect data on

the nature of the businesses bidding on reclamation projects, the

number of employees they have, or their annual receipts in millions of

dollars, we are unable to determine how many of the 724 would qualify

as small businesses under the SBA criteria at 13 CFR 121.201. However,

given a maximum increase of 80 new projects undertaken each year and a

potential bidding pool of over 724 distinct businesses from various

industries, it is unlikely that the rule will have an impact on a

substantial number of small businesses.

The economic impact of the rule on small businesses is expected to

be minimal. This determination is based on the following facts:

--The rule will not increase the cost or burden on businesses

reclaiming sites eligible under the existing regulations;

--The rule merely makes possible for businesses to undertake the

reclamation of areas not previously remined or reclaimed under existing

regulations;

--The undertaking of the discreet reclamation projects opened up by

this new rule is entirely voluntary; and

--The only increase in cost due to these new projects will be that for

documentation related to the removal and sale of coal as an incidental

part of the reclamation project.

This incremental cost will be factored into the cost of the project

bid submitted to the Title IV governmental authority and should prove

to be an insignificant percentage of the total bid. None of the

comments from businesses complained that the rule imposed additional

burdens on doing business. Instead, business commented that the rule

did not go far enough in encouraging the reclamation of eligible sites.

Those who do participate and bid on reclamation projects resulting from

the new rule will do so to reap an economic benefit in the form of a

profit on the sale of coal incidentally mined during the reclamation of

the site. The total amount of Federal money that will be available each

year for AML projects will neither increase nor decrease as a result of

this rule.

3. Small Business Regulatory Enforcement Fairness Act

This rule is not a major rule under 5 U.S.C. 804(2), the Small

Business Regulatory Enforcement Fairness Act. This rule:

a. Does not have an annual effect on the economy of $100 million or

more. It would allow AML agencies to work in partnership with

contractors to leverage finite AML Reclamation Fund dollars to

accomplish more reclamation. To offset the reduction in government

funding, the contractor would be allowed to sell coal found incidental

to the project and recovered as part of the reclamation. Participation

under the rule change is strictly voluntary and those participating are

expected to do so because of the economic benefit.

b. Will not cause a major increase in costs or prices for

consumers, individual industries, Federal, State, or local government

agencies, or geographic regions because the rule

[[Page 7482]]

does not impose any new requirements on the coal mining industry or

consumers, and State and Indian AML program administration is funded at

100 percent by the Federal government.

c. Does not have significant adverse effects on competition,

employment, investment, productivity, innovation, or the ability of

U.S.-based enterprises to compete with foreign-based enterprises for

the reasons stated above.

4. Unfunded Mandates

This rule does not impose an unfunded mandate on State, local, or

Tribal governments or the private sector of more than $100 million per

year. The rule does not have a significant or unique effect on State,

local or Tribal governments or the private sector. The administration

of the AML program by a State or Indian Tribe is funded at 100 percent

by the Federal Government and the decision by a State or Indian Tribe

to participate is voluntary. A statement containing the information

required by the Unfunded Mandates Reform Act (1 U.S.C. 1531, et seq.)

is not required.

5. Executive Order 12630--Takings

In accordance with Executive Order 12630, the rule does not have

significant takings implications. The rule would allow AML agencies to

work in partnership with contractors to leverage finite AML Reclamation

Fund dollars to accomplish more reclamation. To offset the reduction in

government funding, the contractor would be allowed to sell coal found

incidental to the project and recovered as part of the reclamation.

6. Executive Order 12612--Federalism

In accordance with Executive Order 12612, the rule does not have

significant Federalism implications to warrant the preparation of a

Federalism Assessment for the reasons discussed above.

7. Executive Order 12988--Civil Justice Reform

In accordance with Executive Order 12988, the Office of the

Solicitor has determined that this rule does not unduly burden the

judicial system and meets the requirements of sections 3(a) and 3(b)(2)

of the Order.

8. Paperwork Reduction Act

Under the Paperwork Reduction Act, agencies may not conduct or

sponsor a collection of information unless the collection of

information displays a currently valid Office of Management and Budget

(OMB) control number. Also, no person is required to respond to an

information collection request unless the form or regulation requesting

the information has a currently valid OMB control number. Therefore, in

accordance with 44 U.S.C. 3501 et seq, OSM submitted the information

collection and record keeping requirements of 30 CFR Part 874 to OMB

for review and approval. OMB approved the collection activity for Part

874 and assigned it OMB control number 1029-0113. This control number

will appear in section 874.10. To obtain a copy of OSM's information

collection clearance authority, explanatory information, and related

form, contact John A. Trelease at (202) 208-2783 or by e-mail at

[email protected].

9. National Environmental Policy Act

OSM has prepared an environmental assessment (EA) of this rule and

has made a Finding of No Significant Impact (FONSI) on the quality of

the human environment under Section 102(2)(C) of the National

Environmental Policy Act of 1969 (NEPA), 42 U.S.C. Section 4332(2)(C).

The EA and FONSI are on file in the OSM Administrative Record for the

rule.

Authors: D.J. Growitz and Danny Lytton, Office of Surface Mining

Reclamation and Enforcement, U.S. Department of the Interior, 1951

Constitution Avenue, N.W., Washington, D.C. 20240.

List of Subjects

30 CFR Part 707

Highways and roads, Incidental mining, Reporting and recordkeeping

requirements, Surface mining, Underground mining.

30 CFR Part 874

Reclamation, Surface mining, Underground mining.

Dated: December 21, 1998.

Sylvia V. Baca,

Acting Assistant Secretary, Land and Minerals Management.

For the reasons given in the preamble, 30 CFR Parts 707 and 874 are

amended as set forth below:

PART 707--EXEMPTION FOR COAL EXTRACTION INCIDENT TO GOVERNMENT-

FINANCED HIGHWAY OR OTHER CONSTRUCTION

1. The authority citation for Part 707 continues to read as

follows:

Authority: Secs. 102, 201, 501, and 528 of Pub. L. 95-87, 91

Stat. 448, 449, 467, and 514 (30 U.S.C. 1202, 1211, 1251, 1278).

2. In Sec. 707.5, the definition of Government-financed

construction is revised to read as follows:

Sec. 707.5 Definitions.

* * * * *

Government-financed construction means construction funded 50

percent or more by funds appropriated from a government financing

agency's budget or obtained from general revenue bonds. Funding at less

than 50 percent may qualify if the construction is undertaken as an

approved reclamation project under Title IV of the Act. Construction

funded through government financing agency guarantees, insurance,

loans, funds obtained through industrial revenue bonds or their

equivalent, or in-kind payments does not qualify as government-financed

construction.

3. Section 707.10 is revised to read as follows:

Sec. 707.10 Information collection.

Since the information collection requirement contained in 30 CFR

707.12 consists only of expenditures on information collection

activities that would be incurred by persons in the normal course of

their activities, it is exempt from the requirements of the Paperwork

Reduction Act (44 U.S.C. 3501 et seq.) and does not require clearance

by OMB.

PART 874--GENERAL RECLAMATION REQUIREMENTS

4. The authority citation for Part 874 continues to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended.

5. Section 874.10 is added to read as follows:

Sec. 874.10 Information collection.

(a) In accordance with 44 U.S.C. 3501 et seq., the Office of

Management and Budget (OMB) has approved the information collection

requirements of this part. The OMB clearance number is 1029-0113. This

information is needed to ensure that appropriate reclamation projects

involving the incidental extraction of coal are conducted under the

authority of Section 528(2) of SMCRA and that selected projects contain

sufficient environmental safeguards. Persons must respond to obtain a

benefit.

(b) OSM estimates that the public reporting burden for this part

will average 60 hours per project, including time spent reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Send comments regarding this burden estimate

or any other aspect of these information collection requirements,

including suggestions for reducing the

[[Page 7483]]

burden, to the Office of Surface Mining Reclamation and Enforcement,

Information Collection Clearance Officer, 1951 Constitution Avenue,

N.W., Washington, DC 20240; and the Office of Management and Budget,

Office of Information and Regulatory Affairs, Attention: Interior Desk

Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB

Control Number 1029-0113 in any correspondence.

6. Section 874.17 is added to read as follows:

Sec. 874.17 AML agency procedures for reclamation projects receiving

less than 50 percent government funding.

This section tells you, the AML agency, what to do when considering

an abandoned mine land reclamation project as government-financed

construction under Part 707 of this chapter. This section only applies

if the level of funding for the construction will be less than 50

percent of the total cost because of planned coal extraction.

(a) Consultation with the Title V Regulatory Authority. In

consultation with the Title V regulatory authority, you must make the

following determinations:

(1) You must determine the likelihood of the coal being mined under

a Title V permit. This determination must take into account available

information such as:

(i) Coal reserves from existing mine maps or other sources;

(ii) Existing environmental conditions;

(iii) All prior mining activity on or adjacent to the site;

(iv) Current and historic coal production in the area; and

(v) Any known or anticipated interest in mining the site.

(2) You must determine the likelihood that nearby or adjacent

mining activities might create new environmental problems or adversely

affect existing environmental problems at the site.

(3) You must determine the likelihood that reclamation activities

at the site might adversely affect nearby or adjacent mining

activities.

(b) Concurrence with the Title V Regulatory Authority. If, after

consulting with the Title V regulatory authority, you decide to proceed

with the reclamation project, then you and the Title V regulatory

authority must concur in the following determinations:

(1) You must concur in a determination of the limits on any coal

refuse, coal waste, or other coal deposits which can be extracted under

the Part 707 exemption or counterpart State/Indian Tribe laws and

regulations.

(2) You must concur in the delineation of the boundaries of the AML

project.

(c) Documentation. You must include in the AML case file:

(1) The determinations made under paragraphs (a) and (b) of this

section;

(2) The information taken into account in making the

determinations; and

(3) The names of the parties making the determinations.

(d) Special requirements. For each project, you must:

(1) Characterize the site in terms of mine drainage, active slides

and slide-prone areas, erosion and sedimentation, vegetation, toxic

materials, and hydrologic balance;

(2) Ensure that the reclamation project is conducted in accordance

with the provisions of 30 CFR Subchapter R;

(3) Develop specific-site reclamation requirements, including

performance bonds when appropriate in accordance with State procedures;

and

(4) Require the contractor conducting the reclamation to provide

prior to the time reclamation begins applicable documents that clearly

authorize the extraction of coal and payment of royalties.

(e) Limitation. If the reclamation contractor extracts coal beyond

the limits of the incidental coal specified in paragraph (b)(1) of this

section, the contractor must obtain a permit under Title V of SMCRA for

such coal.

[FR Doc. 99-3556 Filed 2-11-99; 8:45 am]

BILLING CODE 4310-05-P